South Florida Sun-Sentinel (Sunday)
Texas software company faces scrutiny after hacking
Before this week, few peoplewere aware of SolarWinds, a Texas-based software company providing vital computer network monitoring services to corporations and government agencies around the world.
But the revelation that elite cyberspies have spent months secretly exploiting SolarWinds’ software to peer into computer networks has put many of its highest-profile customers in national governments andFortune 500 companies on high alert. And it’s raising questions about how soon company insiders knew of its security vulnerabilities as its biggest investors sold off stock.
Founded in 1999 by two brothers in Tulsa, Oklahoma, ahead of the feared turn- of- the- millennium Y2K computer bug, the company’s website says its first product “arrived on the scene to help IT pros quell everyone’s world- ending fears.”
This time, its products are the ones instilling fears. The company on Sunday began alerting about 33,000 of its customers that an “outside nation state” — widely suspected to be Russia — had found a back door into some updated versions of its premier product, Orion. The ubiquitous software tool, which helps organizations monitor the performance of their computer
networks and servers, had become an instrument for spies to steal information undetected.
“They’re not a household name the same way that Microsoft is. That’s because their software sits in the back office,” saidRob Oliver, a research analyst at Bairdwho has followed the company for years. “Workers could have spent their whole career without hear
ing about SolarWinds. But I guarantee your IT department will knowabout it.”
One of SolarWinds’ customers, the prominent California cybersecurity firm FireEye, was the first to discover the cyberespionage operation. FireEye revealed this month that its ownsystemswerebreached by attackers who made off with its defensive hacking tools. Among the other
revealed spying targets were the U.S. departments ofTreasury andCommerce.
The Department of Homeland Security’s cybersecurity unit this week directed all federal agencies to remove thecompromised software and thousands of companies were expected to do the same.
Among the business sectors scrambling to protect their systems and
assess potential theft of information were the electric power industry, defense contractors and telecommunications firms.
The breach has caused a crisis for SolarWinds, now based near Austin. The compromised product accounts for nearly half the company’s annual revenue, which totaled $753.9 million over the first nine months of this year.
Moody’s Investors Service said this week that it was looking to downgrade its rating for the company, citing the “potential for reputational damage, material loss of customers, a slowdown in business performance and high remediation and legal costs.”
SolarWinds’ longtime CEO, Kevin Thompson, had months earlier indicated that he would be leaving at the end of the year. The SolarWinds board appointed his replacement, current PulseSecure CEO Sudhakar Ramakrishna, on Dec. 7, according to a financial filing, a day beforeFireEye first publicly revealed the hack on its own system and two days before the change of CEOs was announced.
It was also Dec. 7 that the company’s two biggest investors, Silver Lake and Thoma Bravo , which control a majority stake in the publicly traded company, sold more than $280 million in stock to a Canadian public pension fund. The two private equity firms in a joint statement said they “were not aware of this potential cyberattack” at the time they sold the stock. It was six days later when SolarWinds disclosed the breach.
The hacking began at least as early as March when SolarWinds customerswhoinstalled updates to their Orion software were unknowingly welcoming hidden malicious code.